RERA

The Law That Changed Indian Real Estate Forever

Before 2016, buying a home in India was an act of faith. You handed over lakhs to a builder, hoped the project would be completed on time, prayed the quality would match the brochure, and crossed your fingers that the floor plan would not change midway. Builders delayed projects by years — sometimes decades. They diverted buyer money to fund other projects. They charged for “super built-up area” that included stairwells, lift shafts, and the garden you shared with 200 other families.

The Real Estate (Regulation and Development) Act, 2016 — commonly known as RERA — was the Indian government’s response to this chaos. It is, without exaggeration, the most significant legislation for home buyers in independent India.

If you are buying a home — or even thinking about it — understanding RERA is not optional. It is the difference between walking into a property purchase with full legal protection and walking in blind.

What Is RERA?

RERA is a Central Government Act passed by Parliament in 2016 and made effective from May 1, 2017. It established Real Estate Regulatory Authorities in every state to regulate the real estate sector and protect the interests of home buyers.

The three pillars of RERA:

Transparency: Builders must disclose all project details publicly
Accountability: Builders face penalties for delays, defects, and non-compliance
Protection: Buyers get legal recourse through a fast-track adjudication process

RERA applies to both residential and commercial projects. It covers new projects as well as ongoing projects that had not received completion certificates as of May 1, 2017. Every state and union territory has its own RERA authority, though the core law is central.

Key RERA Protections for Home Buyers

1. Mandatory Project Registration

Every real estate project above a certain size (typically more than 500 sq. meters or 8 apartments) must be registered with the state RERA authority before any advertising, marketing, or selling can begin.

What registration means:

The builder has submitted all required approvals and documents to the RERA authority
A unique RERA registration number is assigned to the project
Project details are publicly available on the state RERA website
The builder cannot sell or advertise without this registration

Your action: Before paying any money to a builder, verify the RERA registration number on your state’s RERA portal. If the project is not registered, do not invest — no matter how attractive the price or how reputed the builder claims to be.

2. Escrow Account — 70% Rule

This is perhaps the most powerful protection RERA provides. The Act mandates that builders must deposit at least 70% of the money received from buyers into a separate escrow account maintained with a scheduled bank.

What this means:

The builder cannot divert your money to fund a different project
Withdrawals from the escrow account are allowed only for the specific project’s construction costs, with certification from an engineer, architect, and chartered accountant
This dramatically reduces the risk of project delays caused by fund diversion

Before RERA: It was common for builders to collect money for Project A and use it to buy land for Project B. Buyers of Project A would see indefinite delays. The 70% escrow rule makes this practically impossible.

3. Carpet Area — No More “Super Built-Up” Tricks

RERA standardised the definition of carpet area and mandated that all property transactions be based on carpet area, not super built-up area.

Carpet area (as defined by RERA): The net usable floor area of an apartment, excluding the area covered by the external walls, areas under service shafts, exclusive balcony or verandah area, and exclusive open terrace area. However, the internal partition walls of the apartment are included.

Why this matters:

Before RERA, a builder could sell you a “1,200 sq. ft. apartment” where only 700 sq. ft. was the actual apartment you could use. The rest was shared corridors, lift lobbies, stairwells, amenity areas, and the builder’s loading factor. You were paying per square foot on a number that was 40-70% inflated.

Under RERA:

The builder must quote the price based on carpet area
The carpet area must be clearly mentioned in the agreement
Any common area charges must be calculated and disclosed separately
What you see on the floor plan is what you actually get

4. Delivery Timeline and Penalty for Delays

The builder must complete the project and hand over possession by the date committed in the agreement for sale.

If the builder delays:

The builder must pay the buyer interest for every month of delay, at the rate prescribed by the state RERA authority (typically the SBI Prime Lending Rate + 2%)
The buyer has the option to withdraw from the project and get a full refund with interest
The builder cannot force the buyer to accept a delayed unit without compensation

If the buyer delays payment:

The buyer must pay the builder interest at the same rate for any delayed instalments
RERA ensures parity — the penalty rate is the same for both builder and buyer

5. Five-Year Structural Defect Warranty

The builder is responsible for fixing any structural defects or defects in workmanship, quality, or service for five years from the date of handing over possession.

What this covers:

Structural issues (cracks in walls, ceiling, foundation problems)
Plumbing defects (leakages, seepage, poor water pressure)
Electrical wiring defects
Waterproofing failures
Quality issues with fittings and fixtures that were part of the sale agreement

The process:

Report the defect to the builder in writing within 5 years of possession
The builder must rectify the defect within 30 days at no cost to the buyer
If the builder fails to rectify, the buyer can file a complaint with the RERA authority
RERA can order the builder to fix the defect and pay compensation

The builder cannot change the layout, design, or specifications of the project without the written consent of at least two-thirds of the allottees (buyers).

This means:

The 3BHK you were promised will not suddenly become a 2BHK + study
The swimming pool in the brochure cannot be replaced with a parking lot
The marble flooring specified in the agreement cannot be swapped for tiles
The number of floors, number of units, and building layout must remain as approved

7. Title Insurance and Title Guarantee

The builder must ensure and declare that they have clear title to the land on which the project is being developed. If a title defect is discovered later, the builder is liable to compensate the buyer.

RERA also mandates that the builder indemnify the buyer against any loss or damage arising from title defects.

How to Check RERA Registration

Checking RERA registration is simple and should be your first step when considering any property. Here is how:

Step 1: Identify Your State RERA Portal

Every state has its own RERA website. Here are the major state portals:

State	RERA Portal URL
Maharashtra	maharera.mahaonline.gov.in
Karnataka	rera.karnataka.gov.in
Tamil Nadu	tnrera.in
Delhi	reradelhi.in
Uttar Pradesh	up-rera.in
Telangana	rera.telangana.gov.in
Gujarat	gujrera.gujarat.gov.in
Rajasthan	rera.rajasthan.gov.in
West Bengal	wbhira.gov.in (note: West Bengal has HIRA, not RERA)
Kerala	rera.kerala.gov.in
Madhya Pradesh	rera.mp.gov.in
Haryana	haryanarera.gov.in
Punjab	rera.punjab.gov.in
Andhra Pradesh	rera.ap.gov.in
Bihar	rera.bihar.gov.in

Step 2: Search for the Project

On the state RERA portal:

Click on “Registered Projects” or “Search Projects”
Enter the project name, builder name, or RERA registration number
The portal will display the project details if it is registered

Step 3: Verify the Details

Once you find the project, verify:

Registration number: This should match what the builder has shared with you
Completion date: The committed completion date as per the registration
Builder details: Promoter name, entity type, registered address
Approvals: Building plan approval, environmental clearance, commencement certificate
Financial details: The designated bank account for the project
Quarterly updates: Builders are required to update construction progress quarterly on the portal

Step 4: Download the Project Report

Most state portals allow you to download the project’s:

Approved layout plan
Floor plans
Specifications and amenities list
Approved building permission
Financial details of the escrow account

Pro tip: Take screenshots and save PDFs of all project information from the RERA portal before you sign any agreement. If the builder later makes changes, you have the original registered specifications as evidence.

Carpet Area vs Super Built-Up Area — Understanding the Math

This is one of the most confusing aspects of Indian real estate, and RERA’s standardisation has been a massive step forward. But you still need to understand the terminology.

Definitions

Carpet Area (RERA definition):

The net usable floor area within the apartment walls
Includes: Bedrooms, living room, kitchen, bathrooms, balconies (exclusive), internal partition walls
Excludes: External walls, common areas, utility ducts, service shafts

Built-Up Area:

Carpet area + area of external walls + area of the balcony
Typically 10-15% more than carpet area

Super Built-Up Area (also called Saleable Area):

Built-up area + proportionate share of common areas (corridors, lobby, staircase, gym, pool area, garden)
Typically 25-40% more than carpet area
This is the number builders used to quote before RERA, and some still try to use informally

How the Numbers Compare

For a typical apartment:

Metric	Approximate Area	Loading Factor
Carpet area	800 sq. ft.	Base (0%)
Built-up area	920 sq. ft.	+15%
Super built-up area	1,100-1,200 sq. ft.	+37-50%

What this means for pricing:

If the builder quotes Rs 8,000 per sq. ft. on super built-up area for a “1,200 sq. ft.” apartment:

Total price: Rs 96 lakh
Actual usable area: ~800 sq. ft.
Effective rate per sq. ft. of usable area: Rs 12,000

Under RERA, the builder must quote based on carpet area. So the price would be quoted as Rs 12,000 per sq. ft. for 800 sq. ft. carpet area = Rs 96 lakh.

The total price is the same, but the RERA method is transparent. You know exactly how much usable space you are paying for.

Use our stamp duty calculator to estimate registration costs based on the carpet area price.

Builder Obligations Under RERA

RERA places several obligations on builders (legally called “promoters”):

Before Selling

Register the project with the state RERA authority
Open a designated bank account (escrow) for the project
Upload all approvals, plans, and specifications on the RERA portal
Provide a carpet-area-based price sheet
Not advertise any project without RERA registration

During Construction

Deposit at least 70% of collections into the escrow account
Use escrow funds only for the specific project’s construction costs
File quarterly construction progress updates on the RERA portal
File annual audit reports for the escrow account
Not make changes to approved plans without 2/3rd buyer consent
Maintain accurate records of collections, construction progress, and fund utilisation

At and After Handover

Deliver the property by the committed date or pay delay interest
Provide the occupancy certificate (OC) and completion certificate (CC)
Execute the conveyance of common areas to the association of allottees within 3 months of obtaining the OC
Take responsibility for structural defects for 5 years
Rectify reported defects within 30 days at no cost

Penalties for Non-Compliance

For not registering the project: Up to 10% of the project cost, and imprisonment up to 3 years for continued non-compliance
For false information in registration: Up to 5% of the project cost
For non-compliance with RERA orders: Up to 5% of the project cost per violation, plus potential imprisonment
For contravening other RERA provisions: Penalty as determined by the RERA authority or appellate tribunal

How to File a RERA Complaint

If a builder violates any RERA provision, you have a streamlined complaint mechanism:

Step 1: Document the Violation

Gather evidence of the violation:

Your agreement for sale
Payment receipts
Builder communications (emails, letters, WhatsApp messages)
Photographs (construction defects, incomplete work)
RERA portal screenshots showing the registered completion date vs actual status

Step 2: Send a Written Complaint to the Builder

Before filing a RERA complaint, send a formal written notice to the builder documenting the issue and demanding resolution. Keep a copy and delivery proof. Many issues get resolved at this stage because builders know the consequences of a RERA order.

Step 3: File the Complaint on the State RERA Portal

If the builder does not respond or resolve the issue:

Visit your state RERA portal
Register as a complainant (home buyer)
File the complaint online with all supporting documents
Pay the complaint filing fee (typically Rs 1,000-5,000 depending on the state)
You will receive a complaint registration number

Step 4: Hearing and Order

RERA will schedule a hearing (usually within 60 days)
Both buyer and builder present their case
RERA passes an order — this could include:
- Directing the builder to complete and hand over the property
- Directing the builder to pay delay interest
- Ordering a full refund with interest if the buyer chooses to exit
- Directing the builder to rectify defects
- Imposing penalties on the builder

Step 5: Appeal (If Needed)

If either party is not satisfied with the RERA order, they can appeal to the Real Estate Appellate Tribunal within 60 days. The Tribunal’s order can further be challenged in the High Court on questions of law.

Practical Tips for Filing

Be specific: Clearly state what the violation is and what remedy you seek (refund, possession, compensation)
Provide evidence: Attach all relevant documents — agreements, payment proofs, communication
Attend hearings: Your presence (or your lawyer’s presence) during hearings strengthens your case
Legal representation: You can represent yourself or hire a lawyer. For straightforward cases (delay in possession), self-representation is feasible. For complex cases (title disputes, structural defects), consider legal counsel.

RERA and Your Home Loan

RERA has significant implications for your home loan:

Bank’s Perspective

Banks now require RERA registration as a prerequisite for funding any under-construction project
The bank’s legal verification includes checking the project’s RERA status
If a project’s RERA registration lapses or is cancelled, the bank may refuse further disbursements

Pre-EMI Interest During Delays

If the builder delays the project, you continue paying pre-EMI interest to the bank even though you have not received the property
Under RERA, you can claim this pre-EMI interest from the builder as part of your delay compensation
Document all pre-EMI interest payments — you will need them when filing your RERA claim

If You Get a Refund Under RERA

If RERA orders a full refund, you must first repay your home loan from the refund amount
The builder pays the refund to you (or directly to the bank if ordered)
Any interest earned on the refund goes to you
Coordinate with your bank to close the loan and retrieve your documents

RERA Limitations — What It Does NOT Cover

While RERA is powerful, it has limitations:

Existing completed projects: RERA does not apply to projects that had received completion certificates before May 2017
Small projects: Projects below the threshold (500 sq. meters or 8 apartments) are exempt in most states
Renovation and remodelling: RERA does not cover renovation of existing properties
Resale transactions: If you are buying a resale property from an individual (not a builder), RERA does not apply to that transaction
Weak enforcement in some states: While the Central Act is strong, enforcement varies by state. Some states have set up robust RERA authorities (Maharashtra, Karnataka, UP), while others lag behind.
West Bengal: West Bengal passed its own legislation (HIRA — Housing Industry Regulation Act) instead of adopting the Central RERA, which offers weaker protections in some areas

Frequently Asked Questions

Is RERA applicable to plotted development (land plots)?

Yes. Plotted development projects above the threshold are required to be registered under RERA. The builder must register the layout, provide clear title, develop infrastructure (roads, drainage, water), and deliver as per the committed timeline.

Can I exit a project if the builder has not delayed but I changed my mind?

RERA does not give you an automatic right to exit if the builder is fulfilling their obligations. However, your agreement for sale may have cancellation provisions (with applicable forfeiture). Read the agreement carefully before signing.

What if I am buying a resale RERA-registered flat?

If you are buying from another individual (resale), RERA’s project-level protections (escrow, completion timeline) do not directly apply to your transaction. However, the building still benefits from RERA compliance by the original builder (structural warranty, common area conveyance). Verify the original RERA registration and check if any orders are pending.

Does RERA apply to commercial properties?

Yes. RERA covers both residential and commercial projects. The registration and compliance requirements are the same.

How do I find a RERA-registered real estate agent?

RERA also requires real estate agents to register with the state RERA authority. You can search for registered agents on your state RERA portal. Dealing with an unregistered agent is risky — they are not bound by RERA’s code of conduct.

Can NRIs file RERA complaints?

Yes. NRIs who have purchased property in India can file RERA complaints through the online portal. They can also authorise a representative in India to attend hearings on their behalf through a Power of Attorney.

What is the difference between OC and CC?

The Occupancy Certificate (OC) is issued by the local municipal authority confirming that the building is fit for occupation. The Completion Certificate (CC) confirms that the building has been completed as per the sanctioned plan. Both are essential — without an OC, you technically cannot move in, and without a CC, the building may not comply with approved plans.

How has RERA impacted property prices?

RERA has had a mixed impact. In the short term (2017-2019), many small and non-compliant builders exited the market, reducing supply. In the long term, RERA has improved buyer confidence, leading to increased demand from end-users. Prices have remained stable to moderately increasing in most markets, with better quality and transparency.

Sources and References

Real Estate (Regulation and Development) Act, 2016: https://legislative.gov.in/actsofparliamentfromtheyear/real-estate-regulation-and-development-act-2016
MahaRERA (Maharashtra): https://maharera.mahaonline.gov.in/ — One of the most active state RERA portals with extensive project data
Karnataka RERA: https://rera.karnataka.gov.in/ — Registration and complaint filing portal for Karnataka
Ministry of Housing and Urban Affairs — RERA Implementation Status: https://mohua.gov.in/ — Central government updates on RERA implementation across states
National Real Estate Development Council (NAREDCO): https://www.naredco.in/ — Industry body providing RERA-related resources and updates
Reserve Bank of India — Housing Finance Guidelines: https://www.rbi.org.in/ — RBI directions that intersect with RERA for home loan borrowers